No replies to this topic

[TTHQ Staff]

Gene Inger's Daily Briefing. . . . for Thursday, July 15, 2004:

Good Evening;

Bastille Day . . . elicited no 'revolutionary' shifts in European or American markets, with action a prescribed 'gap-down' opening; following that an expected skewering of short-sellers, as well as a subsequent renewed slide once they'd been duly run-in, as suspected likely. Choppy, but generally in the manner suspected, with the Oil surge a very significant contributing factor to the day's second half sobering market reflection.

There are significant issues facing the U.S. market during this anticipated 'summer of discontent'; though none of the serious ones correspond to the growing course about technology. Certainly the Street will be watching IBM (IBM), which we noted a week or so ago had weakening behavior, in the wake of the Intel (INTC) story, but (more). Even 'pricing' levels are overly counted-upon as risks, whereas most is cost-push, not demand-pull inflation; hence doesn't have the impact on interest rates, T-Bonds, or anything related to actions the Federal Reserve could take, contrary to speculation.

Terror threats remain the primary impediment to increased financial commitments to the stock market, though many analysts and money managers will avoid confronting the issue, as they are uncomfortable basing market projections upon the unknown. To a great extent we understand their angst, because this is what we thought would be conditions of the summer…renewed terror threats, temporarily stagnant economic scenes, (but not a severe slowing .. more discussion for ingerletter.com subscribers).

The reality will be that such swoons and squalls likely do a couple things: they tend to work the market lower, as far as most Senior Averages, like Dow Industrials, and also serve to eliminate what had at one point become a (no-longer existing) extended condition. This actually may well lead to a rather robust advance in the market after (detailed discussion about Oils and ramifications for the NDX and SOX sectors).

Daily action . . . believes excessive focus on Intel's (INTC) solid, but disconcerting, report was the financial media's focus, but in reality something else really kept market action from recovering in any persistent way: the big Oil rally. That was barely noted by pundits, but was huge; 1.65 ahead in September Crude. Oil stocks (XOI) limited the damage to the Dow Industrials, while masking selling in a few industrial sectors. Also, increased coverage of problems in Russia tended to reflect concerns about that country delivering the desired increased petroleum output.

Revealed today (by the ABC Minneapolis affiliate), was a story about an Islamic man arrested in the 'twin cities' last Wednesday, after arriving from Washington, DC on a KLM (Royal Dutch) flight that started in Amsterdam (the traveler's journey started in Syria). The Federal Government is treating the issue as 'very sensitive', since he had materials suggesting a link to a known terrorist subject, a suicide note, and a number of CD's or DVD's with anti-American materials. It is feasible law enforcement is trying to disrupt whatever activity he was planning to engage in, so the secrecy surrounding this arrest may relate to current alerts and to some 'plot' that may be 'in-motion' within the United States, at destinations we hasten to point-out, said beyond the 'twin cities'. This is an active investigation at least, and possibly more. (Stay tuned; we'll update.)

Separately (presumably at least), there is mounting concern about domestic terrorism as has been 'officially' expressed. What hasn't been discussed publicly, relates to the comments we've made about risks to our 'energy infrastructure', as noted when we'd mentioned terrorists 'chatter' about the Gulf might refer to the Gulf of Mexico, not just the Persian Gulf (as broadly presumed), because several attacks did occur there. We note last week's FBI memo to local law enforcement agencies mentioned risks to the 'energy infrastructure', and hear authorities are following-up valuable clues, as relates to suspicious incidents that have occurred around the Country recently.

In the meantime, we continue to 'trade' the market routinely, with terror concerns not in the background, but in the forefront of our concerns about this summer's dynamic; and that's simply how it is (harder to analyze than normal economic or market data, because it's definitely not something for which there's precedent or well established contingencies, since nobody knows how the severity of an attack(s) would actually be responded to, or how far-reaching it might be). If all goes just right, the arrest of the Islamist from the KLM/Northwest flight might be a lead to disrupting plots (presuming that he's involved in one of them), and at least continue to help point investigators in the right direction to protecting all of us.

Of course the key market influence superficially related to Intel, and while there is not a compelling reason to project a dramatic rebound there (for now), there is reason to suspect other reports may emphasize that technology is not so defensive as implied by a lot of commentaries. Our own thinking believed the major upgrade cycle could not begin until the combinations of technology or software described last night start arriving, but in the meantime the computer business regressed upward to what we'll call a 'mean', and that's fairly robust behavior. (Further discussion provided readers.)

Yesterday we suspected, with all the focus on Intel, that investors likely failed noticing a little story indicating that 'chemical warfare antidotes' are being quietly shipped to New York and Boston right now, of course cities where both political conventions will occur in the weeks ahead. This is perceived to be a routine precaution (more).

MarketCasts (intraday-audio emails) properly projected a rangebound stock market, with an upward bias following the initial obviously-forthcoming vacuum after Intel's (INTC) release, then possibly a later fade as oil rose dramatically, and other issues started to take center-stage. Thursday may be something like bounce-down-up-fade.

There's was no change in general macro expectations. Those included the feasibility of just a 'flop' and then a 'pop' in the short-run, with risk of larger subsequent pullback action after the short-squeeze on those who 'faded' the Intel story's aftermath. Late in this week or thereafter, it could be (volatile; specifics are reserved for our readers).

Ahead of this timeframe, there has been little doubt but that this kind of 'ambivalence' can last weeks, or more (given what markets might face this year), but generally is not the end of a 'virtuous cycle' from a more-macro perspectives. (More follows.)

Starting Thursday, not to be overlooked, we get updates on PPI and CPI numbers. These may affirm a flattening of sorts in pricing (at relatively higher levels), which if it goes thusly, might emphasize that lots of the earlier increases related to Oil or energy price rises overall, and the (somewhat ameliorated) commodity price increases, that in the more recent time have eased somewhat, are plateauing. While Oil is hovering over 41; retail gasoline prices have already ebbed slightly (but that's a lagging factor), and while we do not expect lower price levels, we do suspect cessation in increases, is ahead. The Oil price rise at this point is a fear-based rally, including supply worries regarding Russia (more reserved commentary).

This to some extent is part of the 'mood' that prevails this Summer, and has potential to keep investors on tenterhooks, for now. We continue to suspect this is all going to have been a protracted zone when viewed in retrospect (timing reserved), but in the shorter-run there is not a particular 'climactic' moment (yet) that can be defined as a 'trigger-pulling' moment for commitments. That may occur, and we pray not as result of an attack on the Nation. But unlike financial purges or other similar conundrums of the past, this cannot be pinpointed more precisely as yet; maybe that's characteristic of this kind of a fairly somber psychology (more reserved assessments).

Bits & Bytes…mentions Intel (INTC), Microsoft (MSFT), Motorola (MOT), Ionatron (IOTN), and Corvis (CORV). The last two are particularly speculative, but interesting in terms of potentialities; the latter based on curiosity whether arbitrage surrounding the pending Focal deal holds back the shares or not, and the former pending signing of the Space Center lease or other matters which may imply progress in weaponry or production contracts. There's no presumption about suitability of anything for anyone.

In summary . . events continue reminding us of risks Allied fighting forces face, given continued attacks on free peoples, by elements including assorted terrorist groups. A world awakening to terror threats grows, as domestic observations absorb us (more).

McClellan Oscillator finds the NY 'Mac' at +8 and the NASDAQ at -32, increasingly erratic overall, and with weekly work suggesting lower prices feasible, with instability of the moment preceding a little washout and rebound first, but not too magnificent to say the least. In light of the Intel 'revelations' (that were internal they say), we looked for a sharp washout followed by a rebound; thereafter got a renewed faltering (more).

As to flies in the bullish alternative continuing, in our view, it's not earnings or markets as such, but realization terror wars continues expanding, not contracting, with difficult challenges ahead, speculated about on occasion, and as attacks showed once more. Ongoing California temblors; increasing in frequency and in linearity of shaking, while activity remains fairly high. Note this afternoon there were 2 magnitude 4.0 or higher on the Richter Scale shakers; one near San Simeon and the other Riverside. This year the prevailing 'forecast' (to extent man can attempt that) for heightened risk of a large quake coincides with the East Coast's hurricane season, as it comes together. The ambivalent disinterest many citizens have about such risks is likely to change if or as (because there's a palpable increase in activity starting now), as these natural risks flare-up. As to 'security' issues, we continue to see progress, but laboriously.

Overall the threat matrix perspectives remain quite high, pretty much worldwide. God be with our troops in continuing struggles; as well citizens who continue at risk while traveling on pleasure or business. Thursday could be bounce-down-up-fade, or so, overall with a mixed tone. S&P futures at mid-evening ahead around 90.

Have a pleasant evening,

Gene Inger,
Publisher


Gene Inger
email me at: office@ingerletter.com
website link: www.ingerletter.com

The Inger Letter™ is available on an annual basis at our site; American Express, Visa, MasterCard are accepted. A Secure Commerce Server is used by our ISP host; where subscriptions can be ordered onsite. Subscriptions can also be ordered by fax, or through our office by telephone or by mail. The Letter is only available via the Internet. Gene’s occasionally quoted in Barron’s, The Wall Street Journal, Investor’s Business Daily, various Internet financial sites, CNNfn, and is an original periodic CNBC market maven. Subscriptions may be received via our private web site: ingerletter.com at $190 annually (published every month; interim's only if needed). Investors focused on the short-term should subscribe to Gene Inger’s Daily Briefing separately or in addition to the Inger Letter. S&P trading ideas mostly originate on the hotline.

Gene Inger’s Daily Briefing™ .... normally posted nightly by 9 pm on www.ingerletter.com plus co-brand sites. Charges do not vary between sites; consult yours for details. The uniqueness of ingerletter.com includes ease of use, bonus charts, news, corporate reports and mutual fund comparison access. A brief capsule comment posted nightly on the web site is intended to be a summary of market condition, with all forecasts reserved for subscribers. A closing S&P or Dow chart is posted nightly.

Gene Inger’s Hotline™ (900.933.GENE) is primarily intended for short-term traders in the S&P and T-Bond contracts, and for investors concerned about market conditions at a given point or price level. Assessment of ongoing overall action & next day’s call is provided. The hotline remains the primary short-term trading service offered. The hotline is updated on opening bell; at 10 a.m. EST, noon, 3 p.m. & a nightly final at 7:30 p.m. Typically, comments are available 5 min. past stated times, and are occasionally more frequent during volatile market swings. When interim comments are intended, they are preannounced on the preceding call.

(900.933.GENE)

(AT&T charge $2. first min. & $.95 for add. min’s. Calls can be dialed only in the USA; overseas note below.)

Canadian & overseas investors plus those calling from blocked phones in the U.S. , can access the hotline via an available annual flat-rate. Call Laura in our office for details. Flat-rate is $1500. plus applicable long-distance and is non-discountable nor refundable; so we urge stockbrokers & other blocked traders unable to access from their office to pre-sample the 900 line via a phone that is not blocked before determining they want the flat-rate service. Many brokers do prefer this service, as it can be thus accessed through their firms WATS lines, thus eliminating certain long distance costs. If you are an international investor/trader; please feel free to contact Laura or Alan in our office (Pacific Time, US) via email or telephone. Orders for the flat-rate hotline may now be charged to the major credit cards via Alan in our California office only, and not via the web site. Checks in U.S. funds or from foreign bank U.S. correspondents are acceptable as well.

Requisite disclaimer: Trading in securities, of any type, may not be suitable for all individuals. Futures and options trading can entail a greater risk, and greater volatility, than trading equities. All trading is at the sole responsibility, discretion and risk of any investor. Our discussions, or trades in stocks & futures, are structural for purpose of giving shape and flow to our work. Suggestions should only be considered as guidelines or input to assist your own good judgement, or that of your financial advisor. Market and economic forecasts in our work are intended to be just guidelines of a general nature (as we view markets), and should not be taken as a recommendation to buy or sell the referenced security, debt instrument, option or futures contract. To actually consider doing so, we advise you consult your broker or other professional to determine your suitability. No commentary in our services is to be considered an offer to buy or to sell securities, or related derivatives. Further, while we certainly may own securities discussed in our commentary, it is our policy not to buy or sell a stock or any position similarly discussed in our Services (with respect to an action idea), prior to providing reasonable opportunity for subscribers to do so first (typically two or three trading days after we publish any selection; unless otherwise noted).

Also, our policy is to decline discussing with anyone what stocks may or may not be purchased, sold or shorted in future issues. In addition, most of our equity strategies are short-to-intermediate in nature, with core holdings intended for the long-term. Most picks are of listed NYSE or Nasdaq stocks that trade with reasonable liquidity. There is no effort to focus on “thin” or low-volume stocks, nor is there a day-trading focus on individual issues in our Services. Occasionally (usually technology) we will find a small-cap stock, but that is not our primary thrust. Also, many traders who prefer equities to trading the S&P on our hotline, will find similar moves among a handful of “favorite” major tech stocks, than often can be treated as surrogates for the S&P, as can the “mini” S&P and Dow contracts, from time to time, or related securities available on the major Exchanges, such as the recently premiered QQQ listing. There is never a direct or indirect sales or marketing relationship between our firm and any brokerage firm, hedge fund or mutual fund, or advisory firm. Right or wrong; our thinking is totally independent. We should be considered an independent resource; to supplement your own work.

E.E. Inger & Co., Inc., and its officers and staff, shall not be liable for any decision made, or action taken by you or others, based upon reliance on news, information, or any material published by our internet and/or telephony resource services. All information provided is to be used, considered or evaluated by investors/readers, on an “as is, with all faults” basis, though we believe sources as reliable. Finally, as we respect subscribers privacy (as we do our own), readers names and email addresses are never rented or made available to any outside service for any purpose whatsoever. We have never rented our mailing lists in the 29 years since first starting the Letter.

Office address:

E.E. Inger & Co., Inc. (The Inger Letter)
100 East Thousand Oaks Blvd.,
Suite 227,
Thousand Oaks, CA 91360

~ Telephone 805.496.6441 ~

E-mail contacts:

All site tech support or password activation questions:
service@ingerletter.com

Alan or Laura Raphael for hotline or office questions; telephone, or email:
office@ingerletter.com

Mr. Inger (only if needed; and not for site tech support please) directly:
gene@ingerletter.com

© 2001 E.E. Inger & Co., Inc. All rights reserved. Reproduction in any form without permission prohibited; while brief excerpted quotations are allowed, providing a link or reference to our web site is included.